On Their Own, Design Teams Must Build on Foundation

The coming year will be a pivotal one for the design teams that the
New American Schools bankrolls.

Since 1992, the teams have received millions of dollars in support
from the nonprofit corporation to construct, field-test, and promote
their designs. That support has fallen to a yearly average of about
$500,000 to $1 million per team since 1995. But this summer, the money
flow will stop, and the design teams will be on their own--charging a
fee for their services and living off the revenues.

"Two years ago, we said, 'Look, there is no more funding after
mid-year 1997,'" recollects John L. Anderson, the president of the
corporation. "And it's really interesting how those crises points
energize and mobilize creativity and thinking."

Each team has been charging schools a fee for services since July
1995, which averages about $50,000 per school in the first year for
technical assistance from a design team.

To help teams make the transition to self-sufficiency, New American
Schools has provided them with consultants to help draft business plans
and marketing strategies.

"That's the best thing that they've done," says Sally B. Kilgore,
the director of the Modern Red Schoolhouse design. "They have brought
in some very talented people to work with us."

Even so, the shift has been challenging. Although all the design
teams are expanding to serve more schools, they differ widely in their
capacity.

Roots and Wings, for example, is based on the widely respected
Success for All program, which tries to improve the reading performance
of children in high-poverty schools. That network now includes some 475
schools nationwide and has a well-developed implementation plan.

Robert E. Slavin, the project's director, says he has never sought
money to disseminate the program, only for research and development.
"We've always been fee-for-service," he says.

Rough Sledding

Other design teams--such as Modern Red Schoolhouse and Expeditionary
Learning--did not exist prior to the creation of New American Schools.
And while they are on the road to self-sufficiency, there's been some
rough sledding.

"It's been, in some ways, exhilarating because there's been a lot
new to learn," says Gregory Farrell, the president of Expeditionary
Learning and the vice president of Outward Bound USA Inc., its parent
organization. "It's not been entirely easy, but I think it makes sense
to us as a way to go and to last."

The group's business plan projects deficits through 2000. But its
parent is raising some $2 million to cover the accumulated deficits and
provide a modest cash flow.

New American Schools is searching for additional jurisdictions where
it can create new markets for the designs.

But design teams have had trouble projecting what the demand will be
for their services in unchartered territory. Many also have grown so
rapidly that they've been forced to hire people without previous
experience in implementing the designs.

And that has required them to provide extensive professional
development for their own staff members.

"You have to make a tremendous investment in people," says Kilgore.
"If we can't grow our own trainers, we're going to be in trouble."

One response has been for the teams to create regional centers that
can serve large groups of schools in one location. Audrey Cohen
College, for instance, plans to use a regional scale-up strategy in the
Southeast.

Design teams also are drawing upon teachers and administrators from
some of their original sites to work with new schools. And they are
trying to be more hard-nosed about the services and materials they
provide.

"In many instances," says Bruce Goldberg, the director of the
Co-NECT design, "we've spent a great deal more time and expense on what
we did than we've ever charged the schools."

Now, they must figure out how to price those services so schools can
still afford them without sacrificing quality. And that is forcing both
sides to clarify their expectations.

Changing the Ballgame

Sue Bodilly, a social scientist at the RAND Corp., which is
evaluating New American Schools, says overall the transition to a
fee-for-service arrangement has been a healthy one.

"If a school is going to pay you to provide assistance, they'd
better be able to see what they're getting," she explains.

And that has pushed the design teams to explain their blueprints
more clearly, to write concrete materials, and to hire people who are
better versed in classroom practices.

"It pushed them into the competitive market," she contends, "and
that changed the ballgame."

Marc S. Tucker, the president of the National Center on Education
and the Economy, the parent group for the National Alliance design
team, maintains that it also has improved the relationship with
individual sites.

"When the people we are working with have to pay for the services
they get from us, they take it much more seriously," he asserts.

"They pay attention to the quality. They pay attention to its
relevance. It becomes a much more equal partnership, and they are much
more likely to use what we have to offer."

Still, Anderson admits that most design teams will require some
working capital in order to make a go of it.

In particular, they have to invest upfront in the human capital
needed to serve more schools. And they must continue to fund research
and development to enhance their designs.

In the long run, he says, the continued survival of the design teams
will be one of New American Schools' greatest legacies.

"Will all seven make it?" he asks. "They all have a real good chance
of making it."